🇵🇭 Payments in the Philippines

The BSP, the NRPS, and three-tier governance

Retail payment governance in the Philippines separates three functions: regulation, rule-making for clearing, and technical operation of the systems. Each sits with a different body. Regulation, licensing, and oversight belong to the Bangko Sentral ng Pilipinas (BSP), the central bank. Clearing house rules are written by an industry association whose members are the participants themselves, the Philippine Payments Management, Inc. (PPMI). Operations are left to third parties that run the switches, the platforms that route messages between participants. BancNet runs the InstaPay switch and the Philippine Clearing House Corporation (PCHC) runs PESONet’s. The central bank operates neither infrastructure itself.

This architecture comes from BSP Circular No. 980, adopted by Monetary Board Resolution No. 1855 of November 2, 2017, which established the National Retail Payment System (NRPS). It rests on two principles. The first is industry self-regulation through a payment system management body, a role the PPMI was granted under a memorandum of understanding signed with the BSP on January 12, 2018. The second separates the scheme from its operation. An automated clearing house (ACH) sets the rules and the design, while a clearing switch operator (CSO) processes the messages. A clearing house is therefore a rulebook and a functional design. The operator alone owns the technical infrastructure that implements them.

The legal basis is Republic Act No. 11127, the National Payment Systems Act, signed on October 30, 2018, and in force since December 2, 2018. It gives the BSP oversight powers over payment systems, makes operating one subject to its prior approval, and requires every operator of payment system (OPS) to register. The Act also creates a category of designated payment systems: those the BSP deems to carry systemic risk, which face stricter requirements. Running a payment service in the Philippines therefore involves three separate counterparts. The BSP grants registration and supervises, the PPMI writes the rules for each clearing house, and the clearing switch operator processes the messages.

InstaPay and PESONet, two ACHs with two jobs

The NRPS produced two clearing houses, each designed from the outset for a distinct use. InstaPay handles low-value instant payments around the clock. The ACH caps them at PHP 50,000 per transaction, and each institution may set a lower limit. PESONet, explicitly designed as an electronic replacement for the check, handles batches that settle the same day, with no regulatory cap of that kind. It targets business payments, payroll, and government disbursements. Checks still circulate alongside both rails, and they still exceed PESONet by value.

The two clearing houses are growing at different speeds. InstaPay more than doubled in a year, while PESONet grew by about a tenth. From January to May 2026, InstaPay processed 3.4 billion transactions against 52.5 million for PESONet, a volume ratio of roughly 65 to 1. By value, the ranking nearly reverses: according to the BSP bulletin, each system carried PHP 6.6 trillion over the same period. The average InstaPay ticket is therefore far smaller than the average PESONet ticket, since both rails move the same total value with volumes in that ratio. An aggregate volume figure says nothing about average ticket size, so infrastructure has to be sized rail by rail.

Since 2026, Circular No. 1238 has governed how supervised institutions price electronic fund transfers. It requires pricing based on an analysis of costs actually incurred. The price gap allowed between an on-us transfer and an interbank transfer is limited to the switching cost, the cost of routing the message outside the institution. The BSP has publicly denied mandating free transfers: the rule targets how prices are set, not the price itself. The market moved fast anyway. As of May 31, 2026, 20 institutions charged zero pesos on PESONet and four on InstaPay, before the wave of announcements in July.

QR Ph: one standard, two codes, 2.5 million merchant IDs

QR Ph is the Philippines’ national QR payment code standard, and its format follows the EMVCo specification. Circular No. 1055 of 2019 makes it mandatory for all participating providers, including banks and e-money issuers. Before the circular, each provider issued its own code, so acceptance depended on which provider the merchant had chosen. The underlying rail is InstaPay, which makes the code interoperable by design: the customer does not need an account with the merchant’s provider. Since the circular, proprietary codes have had no regulatory basis.

The two use cases opened one after the other. QR Ph P2P arrived in November 2019 for person-to-person transfers. QR Ph P2M was piloted on April 30, 2021, and fully launched on October 12, 2021, in a setup that spares small merchants from buying a terminal. The merchant prints the code generated by its provider, displays it, and gets paid. Its only hardware is a printed sign. The PPMI later made the two flows visually distinct to end the confusion between them. The InstaPay QR, bearing the InstaPay logo, is for P2P; the red, blue, and yellow QR Ph is for merchant payments.

Two facilities built on the clearing houses round out the QR Ph standard. Bills Pay Ph provides interoperable bill payment, making any biller reachable from any participating institution. It had 1,978 registered billers as of May 31, 2026, representing 1,894 unique entities. Volume is still modest: 909,516 transactions in May 2026, after more than tripling in a year. Credit card repayment is by far the largest biller category. EGov Pay covers government collections and lists 1,677 public billers, but handled only 20,052 transactions in May 2026. The two facilities list a similar number of billers, yet EGov Pay handles a fraction of Bills Pay Ph’s volume. Payments from individuals to the government remain the biggest blind spot in the Philippines’ digitalization.

Accepting payments in the Philippines: licenses, fees, and the acceptance chain

Since Circular No. 1198 of July 19, 2024, which took effect on August 8, 2024, merchant acquiring has been a licensed activity. The circular defines Merchant Payment Acceptance Activities: giving a merchant the means to accept a payment instrument, collecting and transmitting the data, and providing related services. Any entity carrying out these activities must obtain a merchant acquiring license from the BSP, whether or not it is already registered as an OPS. A company that obtains the license without being an OPS does not need to register separately. Registration is not required on top of the license.

The territorial nexus test decides which entities the circular covers, and it is drafted broadly. An OPS is deemed to operate in the Philippines if the OPS, the merchant, or both are located there. A foreign aggregator that collects payments for Philippine merchants is therefore in scope, and having no local entity does not exempt it from the license. The circular also requires a full risk management framework covering settlement, operations, IT systems, anti-money laundering, and end-user protection.

• The InstaPay cap is a design constraint, not a detail. An online merchant with a high average ticket cannot rely on QR Ph alone. It needs cards, PESONet, or split payments, with the reconciliation consequences that entails.
• The merchant’s actual cost is not in the rules. The BSP specifies that the customer pays no fee and that the merchant fee must remain reasonable, but it has not published a fee schedule. Pricing is negotiated bilaterally with the acquirer.
• Transfer fees depend on the sending and receiving institutions. Depending on the institution, InstaPay fees range from PHP 0.00 to PHP 35.00 and PESONet fees from PHP 0.00 to PHP 616.54, according to the BSP’s May 2026 fee listing. A mass payout has to model this cost bank by bank.
• Reconciliation draws on three sources: the acquirer’s transaction log, the credit advice on the account, and MID matching. Once a merchant works with several acquirers, it needs an internal MID registry to avoid double-counting sales.
• Checks live on in B2B. With PHP 21.1 trillion from January to May 2026 against PHP 6.6 trillion for PESONet, business collections must plan for check handling, including the stock of postdated checks used as loan collateral.

GCash, Maya, and the e-money issuer regime

Two e-wallets dominate everyday digital payments in the Philippines. GCash is run by G-Xchange, Inc., a subsidiary of Globe Fintech Innovations (Mynt), a joint venture of Globe Telecom, Ayala Corporation, and Ant Group. It claimed 81 million active users and 2.5 million merchants and sellers in January 2025. Maya, formerly PayMaya, operates through two separate entities: Maya Philippines, Inc. for payments and Maya Bank, Inc. for digital banking. The BSP supervises both, but under two different regimes, one for e-money issuers and one for banks.

The figure of 326 million e-money accounts counts open accounts, not banked people, in a country of just over 110 million. It includes many duplicates and dormant accounts, as the BSP itself notes about its own data. Declines in other indicators stem from institutions systematically deactivating unverified accounts. Actual usage is measured by financial inclusion surveys, which ask people rather than count records, and their results are much lower.

Non-bank e-money issuer licenses reopened after a moratorium on new licenses that had been in place since late 2021 and was extended once. Monetary Board Resolution No. 1400 lifted it as of December 16, 2024. The moratorium on digital banks ended at the same time, but the BSP keeps a cap of 10 licenses. Six are held by GoTyme Bank, Maya Bank, Overseas Filipino Bank, Tonik Digital Bank, Union Digital Bank, and UNObank, which leaves four available.

Remittances bring in $35.6 billion a year

Remittances are the funds that overseas Filipino workers send home. The BSP publishes two measures. In 2025, cash remittances through banks reached $35.63 billion, up 3.3% from 2024. Personal remittances, a broader measure that includes in-kind transfers and flows outside declared banking channels, came to $39.62 billion. The split between land-based and sea-based workers is stable, at $28.49 billion and $7.14 billion. These flows amounted to about 8.3% of GDP in 2024. The two series do not cover the same scope, so a comparison that switches from one to the other between years shows a change that reflects only the switch in measure.

The BSP’s breakdown by source country puts the US at 39.7% in 2025, followed by Singapore (7.3%), Saudi Arabia (6.6%), Japan (5.0%), and the UK and the United Arab Emirates (4.6% each). This ranking reflects how funds are routed rather than where senders live. The BSP records the immediate source of the funds, meaning the correspondent bank that presents them, which is most often a US bank. The US share therefore includes transfers that actually originated in the Gulf or in Asia. A corridor’s collection network and sending currency depend on where the workers live, which this statistic does not show.

A remittance corridor breaks down into three segments with different levels of digitalization. Receiving is already largely digital and interoperable. Connecting to an InstaPay partner reaches 99% of the system’s transaction accounts, according to the BSP’s account penetration measure at end-March 2025. Sending remains physical and therefore expensive: branch-based collection carries rent, staff, and cash-in-transit costs, which limits how far prices can fall however well the Philippine leg is built. The last mile, from the credited account to actual spending, still largely escapes digital payments. With receiving already covered and sending constrained by its physical costs, the remaining room for growth lies in the last mile, not in the cross-border segment.

Cash, sari-sari stores, and the missing account

Each year the BSP measures the digital share of retail payments. It uses the Better Than Cash Alliance methodology, which divides digital transactions by total retail payments in a typical month. The 2024 result, published in July 2025, is 57.4% of monthly volume and 59.0% of value, up from 52.8% and 55.3% in 2023. Over the past decade, the digital share rose from 1% in 2013 to 10% in 2018, then to 30.3% in 2021. More than four in 10 retail payments were therefore still made in cash or on paper in 2024.

The sari-sari is a neighborhood store that sells goods by the piece. These corner shops are where cash holds out most stubbornly against digital payments. The BSP explicitly targets them in its own QR Ph materials, along with market vendors (the palengke) and tricycle drivers. Industry estimates cited by the Philippine business press in 2025 put their number at around 1.3 million. Official statistics do not count them as such, and no official figure is widely accepted, so precise sizing is out of reach. Each store gets equipped on its own, by displaying a printed code, with no terminal. Adoption therefore advances one onboarding at a time. The Paleng-QR Ph Plus program, run by the BSP with the Department of the Interior and Local Government, works on this principle, one local government at a time.

Formal account ownership among Filipino adults fell between 2021 and 2025. The BSP’s inclusion survey, published in April 2026, found that 50% of adults held a formal account in 2025, down from 56% in 2021. The breakdown is 36% for e-money accounts and 23% for bank accounts, with some overlap between the two. The survey covered 10,836 eligible adults, with an 81% response rate. Household-level access, by contrast, is much higher, at around 85%. About one household in six therefore has no member with an account, and the gap with individual ownership leaves half of adults relying on someone else’s account.

The basic deposit account is a bank deposit account whose minimum features are set by regulation rather than left to the bank. Circular No. 992, approved by Monetary Board Resolution No. 58 of January 11, 2018, and published on February 11, created it to bring unbanked adults into the system. The opening deposit is PHP 100 at most. There is no minimum balance, no dormancy fee, and a zero reserve requirement. The balance is capped at PHP 50,000; above that, the bank must convert the account into a regular deposit account. Onboarding follows simplified due diligence for low-risk customers, and identity can be established with any document deemed sufficient under Section X803 of the Manual of Regulations for Banks. This regime lowers the documents needed to open an account, just as light micro-merchant onboarding lowers those needed to accept payments.

• No account: 69% of people who do not use digital payments cite this as their main reason, according to the add-on question in the first-quarter 2026 Consumer Expectations Survey reported by the BSP.
• Not knowing how to use them: 65%. A usage barrier, not an access barrier, and one that no license or rail can remove.
• Security concerns: 57%, ahead of unfamiliarity with the offerings (53%) and poor internet connectivity (46%).
• Fees seen as too high: 37%. This was the rationale for Circular No. 1238, and it is the only item on the list that a regulatory decision addresses directly.
• Among users, the main drivers are e-commerce (55%), bill payment (48%), and transfers (46%). Payments to the government account for only 13%, which points the same way as the low P2G digitalization rate (24.6%).

Work in progress: fraud, direct debit, cross-border payments, and pegged tokens

Republic Act No. 12010, the Anti-Financial Account Scamming Act (AFASA), approved on July 20, 2024, makes abuse of payment accounts a criminal offense. The law responds to the fraud that came with the rapid growth of instant payments. It creates three stand-alone categories of offense: money muling (lending, renting, or selling an account, or recruiting others to do so), social engineering, and unauthorized account access. It covers deposit, credit, wallet, and transaction accounts at BSP-supervised institutions, with no distinction between banks and e-money issuers. Penalties for social engineering range from 10 to 12 years in prison, plus fines of PHP 500,000 to PHP 1 million.

The BSP issued three implementing circulars in 2025, Nos. 1213, 1214, and 1215. They cover prevention and detection, temporary holds on suspicious transactions, tracing and recovery of disputed funds, and an expedited procedure for authorities to access account information. Institutions must deploy multi-factor authentication and a fraud management system proportionate to their size and complexity; the circulars set the obligation without prescribing a technology. To comply, an institution must be able to freeze and trace disputed funds quickly, whatever technology it uses to do so.

• Interoperable direct debit. Developed by the industry under the PPMI, Direct Debit is meant to replace bilateral Auto Debit Arrangements and the practice of holding postdated checks for loan installments. The BSP said it was being tested with candidate participants, with a pilot expected in 2025. It is the missing building block for recurring payments in the Philippines.
• Request-to-Pay. The first use case is R2P InstaPay Cash-In, which lets a user fund an account without logging in to the account that supplies the funds. Wallet top-ups can therefore be offered without a bilateral agreement between institutions. It had a soft launch on December 15, 2023, with commercial rollout announced for 2025.
• ISO 20022. The BSP has set up a harmonization project team. This is not cosmetic: message richness determines how well complaint handling, monitoring, and automated reconciliation work.
• Transit fare collection. The Department of Transportation’s Automated Fare Collection System plans for QR Ph at the turnstiles, contactless EMV cards, and operator prepaid cards such as beep, with full rollout targeted for 2027.
• The pegged token. PHPC, a peso-backed token issued by Betur Inc. / DCPay Philippines Inc. under the Coins.ph brand, was tested in the BSP’s regulatory sandbox. One clause to read before any production use: when the sandbox closes, the issuer commits to redeeming all PHPC in circulation.

On cross-border payments, the Philippines chose a different strategy from its Southeast Asian neighbors. Thailand, Malaysia, Indonesia, and Singapore scaled up bilateral QR and P2P links, corridor by corridor and agreement by agreement. PromptPay linked to PayNow as early as 2021, and DuitNow QR to QRIS. The region has some 30 documented corridors. In its 2024 report, the BSP highlights only one cross-border initiative, Project Nexus, in which the Philippines took part in phase 3 and then phase 4. The multilateral option avoids renegotiating an agreement for each destination, since each national system connects only once. But it opens no corridor until the shared platform is live, whereas a bilateral link takes effect as soon as it goes into production.